Middlesex Water Company Announces Second Quarter 2019 Financial Results
July 31 2019 - 3:28PM
Middlesex Water Company (the “Company” or “Middlesex”),
(Nasdaq:MSEX), a provider of water, wastewater and related services
primarily in New Jersey and Delaware, today reported financial
results for the second quarter ended June 30, 2019.
Second Quarter Operating ResultsConsolidated
net income for the second quarter 2019 decreased $0.5 million to
$8.1 million as compared to the same period in 2018. Diluted
earnings per share for the quarter ended June 30, 2019 were $0.49,
as compared to $0.52 for the same period in 2018.
Operating revenues decreased by $1.5 million to $33.4 million
with unfavorable weather patterns in the mid-Atlantic region
reducing water demand across all classes of regulated customers. We
continued to add new customers in our Delaware systems at an
annualized pace of 4.3%, which helped to offset some of the
consumption demand decline. Revenues also declined in our
non-regulated operations. As previously disclosed in our
public filings, we changed the structure of the wastewater
component of our new 10-year contract (effective January 1, 2019)
to operate the City of Perth Amboy, New Jersey’s (Perth Amboy)
water and wastewater systems. This change also resulted in a
like amount decrease in operating expenses for the quarter.
On an annual basis, this amounts to $5.6 million in lower revenue
and lower expense.
Operations and maintenance expenses were $16.8 million, which is
slightly below the expenses for the same period in 2018. The
lower expenses attributable to the Perth Amboy contract change
helped to offset higher labor related costs. Middlesex
continues to add personnel to meet increasing regulatory
requirements and customer growth in a competitive job market.
Income Tax expense decreased $1.2 million from
the same period in 2018, primarily due to the regulatory accounting
treatment of tangible property regulations related expense
deductions, which was approved in Middlesex’s 2018 base rate case
decision and lower-pre-tax income.
Middlesex Chairman, President and Chief Executive Officer Dennis
W. Doll said, “While unfavorable weather impacted customer water
demands in the second quarter, we have experienced more typical
conditions in the third quarter and are optimistic that customer
water usage will increase to forecasted levels during our peak
summer season. But, given the early revenue pressures and
increasing labor costs, we have established 2019 annual earnings
expectations at $1.94 - $1.98 per diluted share,” said Doll.
“We continue to make investments in numerous water and wastewater
infrastructure projects at a robust pace under our Water for
Tomorrow® capital program -- all with a focus on improving system
reliability and resiliency,” added Doll.
Six Month Operating ResultsConsolidated
operating revenues for the six months ended June 30, 2019 were
$64.0 million, a decrease of $ 2.0 million from the same period in
2018, primarily due to due to unfavorable weather which reduced
water demand in our regulated Middlesex and Tidewater
Systems. Non-regulated revenues also decreased due to changes
in our new Perth Amboy contract. Partially offsetting these
decreases were Middlesex’s April 1, 2018 base rate increase and
Tidewater customer growth. For the six months ended June 30,
2019, diluted earnings per share were $0.88 as compared to $0.80
for the same period in 2018.
Operation and maintenance expenses for the six months ended June
30, 2019 decreased $1.8 million compared to the same period in 2018
due to reduced expenses related to our new Perth Amboy contract and
reduced production costs related to lower customer demand. These
lower expenses were partially offset by increased labor costs.
Income Tax expense for the six months ended June 30, 2019
decreased $2.6 million as compared with the same period in 2018,
primarily due to the regulatory accounting treatment of tangible
property regulations related expense deductions, lower-pre-tax
income and a lower Tidewater effective income tax rate resulting
from the March 2019 tariff rate reduction.
Quarterly Dividend Declared As previously
announced, the Company’s Board of Directors declared a quarterly
cash dividend of $0.24 per share, payable September 3, 2019 to
common shareholders as of August 15, 2019. Middlesex has paid
cash dividends continually since 1912 and has increased its annual
dividend rate for 46 consecutive years. The Company’s 5%
Discount, in effect for participants in the Company’s Investment
Plan on purchases made by optional cash payment or dividend
reinvestment, is nearly fully subscribed and is anticipated to
continue until 200,000 shares are purchased at the discounted price
or December 30, 2019, whichever occurs first.
About Middlesex Water CompanyMiddlesex Water
Company, organized in 1897, is an investor-owned water and
wastewater utility, serving customers primarily in central and
southern New Jersey and Delaware.
This release contains forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including, among others, earnings guidance, our long-term
strategy and expectations, the status of our acquisition program,
the impact of our acquisitions, the impact of current and projected
rate requests and the impact of our capital program on our
environmental compliance. There are numerous important factors that
could cause actual results to differ materially from those
expressed or implied by such forward-looking statements including:
general economic business conditions, unfavorable weather
conditions, the success of certain cost containment initiatives,
changes in regulations or regulatory treatment, availability and
the cost of capital, the success of growth initiatives and other
factors including without limitation, those described under
“Forward-Looking Statements” and “Risk
Factors” in our annual and quarterly filings with
the Securities and Exchange Commission.
Contact: Bernadette Sohler, Vice
President – Corporate AffairsMiddlesex Water Company 485C
Route 1 SouthSuite 400Iselin, New Jersey 08830(732)
638-7549 www.middlesexwater.com
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MIDDLESEX WATER
COMPANY |
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
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(Unaudited) |
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(In thousands except per share amounts) |
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Three Months Ended June
30, |
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Six Months Ended June
30, |
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2019 |
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2018 |
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2019 |
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2018 |
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Operating Revenues |
$ |
33,393 |
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$ |
34,919 |
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$ |
64,090 |
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$ |
66,096 |
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Operating Expenses: |
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Operations and Maintenance |
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16,781 |
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16,825 |
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32,901 |
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34,659 |
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Depreciation |
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4,123 |
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3,736 |
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8,170 |
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7,345 |
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Other Taxes |
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3,539 |
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3,637 |
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7,042 |
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7,021 |
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Total Operating Expenses |
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24,443 |
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24,198 |
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48,113 |
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49,025 |
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Operating Income |
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8,950 |
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10,721 |
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15,977 |
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17,071 |
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Other Income (Expense): |
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Allowance for Funds Used During Construction |
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643 |
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214 |
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1,158 |
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381 |
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Other Income (Expense), net |
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(80 |
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571 |
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(138 |
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868 |
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Total Other Income, net |
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563 |
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785 |
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1,020 |
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1,249 |
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Interest Charges |
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1,788 |
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2,068 |
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2,988 |
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3,206 |
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Income
before Income Taxes |
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7,725 |
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9,438 |
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14,009 |
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15,114 |
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Income Taxes |
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(421 |
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763 |
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(687 |
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1,945 |
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Net Income |
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8,146 |
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8,675 |
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14,696 |
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13,169 |
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Preferred Stock Dividend Requirements |
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36 |
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36 |
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72 |
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72 |
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Earnings Applicable to Common Stock |
$ |
8,110 |
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$ |
8,639 |
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$ |
14,624 |
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$ |
13,097 |
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Earnings per share of Common Stock: |
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Basic |
$ |
0.49 |
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$ |
0.53 |
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$ |
0.89 |
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$ |
0.80 |
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Diluted |
$ |
0.49 |
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$ |
0.52 |
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$ |
0.88 |
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$ |
0.80 |
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Average Number of |
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Common Shares Outstanding : |
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Basic |
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16,519 |
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16,388 |
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16,474 |
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16,371 |
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Diluted |
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16,675 |
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16,544 |
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16,630 |
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16,527 |
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Cash Dividends Paid per Common Share |
$ |
0.2400 |
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$ |
0.2238 |
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$ |
0.4800 |
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$ |
0.4475 |
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